Morgan Stanley upgrades Axis Bank Ltd to "overweight" from "equal-weight" and raises its target price to 1,300 rupees from 1,000 rupees, citing reduced loan exposure to problem sectors such as infrastructure over the last 12-15 months.

While the brokerage house says Axis Bank is still exposed to a weaker economy, the reduced exposure to problem sectors coupled with a better balance sheet implies the bank's ability to withstand stress is very high.

Morgan Stanley also adds valuation multiples for Axis Bank factor in a fair degree of weakness.